[Asia Economy Reporter Park Soyeon] Coupang has initiated refinancing of 410 billion KRW in funds borrowed for the construction of its Daegu advanced logistics center.
According to the investment banking (IB) industry on the 20th, Coupang is recruiting a syndicate for a secured loan of 410 billion KRW using local real estate as collateral. The syndicate recruitment is divided into senior tranche of 300 billion KRW and subordinated tranche of 110 billion KRW based on collateral and repayment priority.
The collateral real estate, Coupang Daegu Logistics Center, is located in Eungam-ri, Guji-myeon, Dalseong-gun, Daegu Metropolitan City, within the national industrial complex. The site area is 78,800㎡ (23,837 pyeong) with a building of 2 basement floors and 10 above-ground floors, completed in January this year.
The annual loan interest rate, including acquisition fees, is in the low 3% range for the senior tranche and mid-5% range for the subordinated tranche. The loan maturity is 5 years. KDB Industrial Bank and capital companies are expected to participate in the syndicate. Internal reviews by financial companies will be conducted in February, with investor recruitment planned to be completed in March.
A financial company official stated, "Although Coupang has signed a long-term master lease contract ensuring high stability, the loan interest rate is relatively low amid rising interest rates, so we are considering participation in the syndicate."
Coupang currently owns about 100 logistics infrastructures in over 30 regions nationwide. The total floor area is 2,322,575㎡ (702,579 pyeong), equivalent to about 400 soccer fields. Seventy percent of the population lives within 11 km of a Coupang logistics center.
To strengthen delivery competitiveness, Coupang plans to build 13 new logistics centers in 10 regions nationwide in addition to its existing logistics infrastructure. The total investment amount is approximately 1.8 trillion KRW.
Specifically, new logistics centers are being constructed in Daegu (320 billion KRW, 100,000 pyeong), Daejeon (60 billion KRW, 10,000 pyeong), Chungbuk Eumseong (100 billion KRW, 30,000 pyeong), Gyeongbuk Gimcheon (100 billion KRW, 27,000 pyeong), Gwangju (224 billion KRW, 48,000 pyeong), Chungbuk Jecheon (100 billion KRW, 30,000 pyeong), Gyeongnam Hamyang (72 billion KRW, 20,000 pyeong), Jeonbuk Wanju (100 billion KRW, 30,000 pyeong), Gyeongnam Changwon·Gimhae (300 billion KRW, 55,000 pyeong), Chungbuk Cheongju (400 billion KRW, 86,000 pyeong), Busan (220 billion KRW, 51,000 pyeong), and Gyeryong (17 billion KRW).
Recently, domestic and foreign investors have been actively investing in new logistics center construction in Korea. This is due to the explosive growth of the e-commerce market caused by COVID-19, which has sharply increased demand for new logistics centers. Earlier, among commercial banks, Shinhan Bank participated in financing (PF senior tranche) for the construction project of a logistics center in Wongok-myeon, Anseong-si, Gyeonggi-do.
Hanwha Investment & Securities recently participated in equity investment and project financing (PF) for the logistics center development project in Gunryang-ri, Icheon-si, Gyeonggi-do. KB Securities and Eugene Investment & Securities also participated as PF arrangers for financing (totaling 67 billion KRW) for the construction of a temperature-controlled logistics center in Seolseong-myeon, Icheon-si, Gyeonggi-do.
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